Insurance on demand transaction management system

ABSTRACT

An intermittent risk exposure liability insurance method comprising the steps of: establishing an Internet business site enabled for communication with insurers and insureds through Internet service providers; enrolling the insureds in intermittent risk exposure liability insurance policies, the policies providing for a variable insurance premium rate depending upon an intermittent use of an insured article; logging start and completion times of each intermittent use of the insured article on the Internet business site by the insured; verifying start and completion times of use of the insured article in accordance with the logged start and completion times; and applying and billing premium insurance rates in accordance with the verified and logged start and completion times of use.

RELATED APPLICATIONS

[0001] This application claims priority and is entitled to the tilingdate of U.S. Provisional application Ser. No. 60/339,597 filed Dec. 8,2001, and entitled “Insurance On Demand Transaction Management System.”The contents of the aforementioned application are incorporated byreference herein.

[0002] INCORPORATION BY REFERENCE: Applicant(s) hereby incorporateherein by reference, any and all U.S. Patents, U.S. patent applications,and other documents and printed matter cited or referred to in thisapplication.

BACKGROUND OF THE INVENTION

[0003] 1. Field of the Invention

[0004] This invention relates generally to commercial liabilityinsurance for equipment, vehicles and the like, and more particularly toan Internet business method for adjusting insurance rates for suchcommercial liability based upon the communication potential of theInternet.

[0005] 2. Description of Related Art

[0006] The following defines the present state of this field:

[0007] In its present form construction equipment insurance, for themost part, covers the more mundane untoward events such as fire, theft,possibly some categories of weather related loses and normal liabilityexposure for accidents occurring in an area under the insured's auspicessuch as a yard. It also has lumped in the policy or as a constant inforce under, a provision covering the much higher risk exposure ofequipment working in the field. Tile underwriter does not know theactual amount of high risk exposure to which a crane will be subject.They must rely on statistically determined industry usage criteria as abasis for assigning a premium cost. If, in actuality, an insureds usagepattern is below the predetermined level than they are, in effect,paying a higher premium than need be. If they exceed the traditionalindustry usage threshold the underwriter is overly exposed because thepremium has been determined on less than actual job site risk exposure.The present invention improves on this by breaking out high riskexposure components and providing them through an on demand system. Thisis advantageous to both the insurer and the insured if performed asspecified in the model. It will result in the insurer providing the highrisk component of coverage at the appropriate rate for the entire lengthof the high risk exposure period. The insured on the other hand, onlypays for this coverage on an as needed basis, it is broken out inspecified increments and at a predetermined rate.

[0008] The prior art teaches the extending of insurance for commercialliability but does not teach an insurance on demand, Internet based,system such as is described and claimed herein. The present inventionfulfills these needs and provides further related advantages asdescribed in the following summary.

SUMMARY OF THE INVENTION

[0009] The present invention teaches certain benefits in constructionand use which give rise to the objectives described below.

[0010] The present invention is an intermittent risk exposure liabilityinsurance method comprising the steps of establishing an Internetbusiness site enabled for communication with insurers and insuredsthrough Internet service providers, enrolling the insureds inintermittent risk exposure liability insurance policies of the insurers,the policies providing for a variable insurance premium rate dependingupon an intermittent use, by the insureds, of an insured article,logging start and completion times of each intermittent use of theinsured article on the Internet business site by the insured, verifyingstart and completion times of use of the insured article in accordancewith the logged start and completion times, and applying and billingpremium insurance rates in accordance with the verified and logged startand completion times of use.

[0011] The present invention is a process for providing intermittentrisk exposure liability insurance comprised of steps establishing anInternet site enabled f-or communication with risk assumption entities(IRAE's) 300 (insurers) and insureds (customers) 100 through Internetservice providers, facilitating contractual relationships (policies) forintermittent risk exposure liability insurance, enabling policies to beconfigured to allow for variable premium rates within one transactionbased on changes in risk exposure as a function of time within oneoverall transaction, logging start and completion times of eachintermittent use of the insured article or occurrence of a riskgenerating event on the Internet business site by the insured, verifyingstart and completion times of use of the risk generating article inaccordance with logged start and completion times, and applying andbilling insurance rates in accordance with the verified start andcompletion times.

[0012] This invention relates generally to providing liability insuranceon an intermittent as needed basis and, more particularly, to managementand facilitation of the transactions that will be required between RiskAssumption Entities (RAE's)300, primarily, but not limited to, insurancecompanies and their customers. The present invention teaches a processby which the communication potential of the Internet may be used as autility to provide Insurance On Demand.

[0013] This model provides another incidental benefit by making theinsurance component cost of operating a piece of equipment readilyapparent. This in and of itself is a convenience factor when customers,the insured, are establishing their rates or determining net profit on ajob. In some instances equipment owners may choose to mark this costcomponent up and possibly even break it out on their customer's invoice.This would be similar to what is done in the car, truck and equipmentrental businesses at considerable profit to those entities.

[0014] This model will also be configured to enable consumersinstantaneous access to auto, truck or equipment insurance “On Demand”to satisfy rental agency requirements at more economical rates. Thisprocess will further accommodate the insurance needs of seldom usedprivate or commercial vehicles, recreational equipment or unusuallyhazardous undertakings. In short, this process is designed to facilitatethe providing of intermittent insurance coverage regardless of how therisk is generated.

[0015] A primarily objective of the present invention is to provide aliability insurance method having advantages not taught by the priorart.

[0016] Another objective is to provide such a method capable of reducingthe cost of insurance and the exposure of insurers.

[0017] A further objective is to provide such a method capable ofproviding instant insurance coverage for standard liabilities.

[0018] A still further objective is to provide such a method capable ofverifying the physical location of an insured equipment.

[0019] Other features and advantages of the present invention willbecome apparent from the following more detailed description, taken inconjunction with the accompanying drawings, which illustrate, by way ofexample, the principles of the invention.

DETAILED DESCRIPTION OF THE INVENTION

[0020] The present invention teaches a business model that will have thefollowing features and benefits not taught by prior art. The model willpermit instantaneous access to a Risk Assumption Entity (RAE) 300 forintermittent risk exposure. The model will facilitate customers 100ccess to risk coverage at pre-negotiated rates based on predeterminedcriteria which will be constantly updated. Customers 100 will be able toassist in this update process. They may seek to expand or contract theirrisk coverage portfolio at will. Coverage will be able to be secured fordifferent dollar amount liability requirements such as a contract thatmay require higher liability coverage or a venue such as a private lakethat may require proof of a particular level of coverage before onecould use a watercraft there. The model will allow RAE's 300 to moreclosely target their risk exposure and adjust premiums accordingly sincethe model mostly addresses exposures of a shorter duration. The modelmay also allow for the bundling of risk exposures of a certain type intoa financial instrument that may be traded to allow a company to hedgeexcess exposure in a particular category. This may also introduce marketforces that may be triggered by changing risk factors or capitalavailability. A RAE 300 may choose to build a particular portfolio basedon specific risk scenarios they have deemed to be in their bestinterest. The foregoing will be accomplished by the use of the

[0021] Internet Wireless technology and the Satellite Global Positioningsystem in the following manner:

[0022] (A) Proprietary software will be written which will providesecure internet communication between the individual or commercialenterprise with a risk exposure and an RAE 300 such as, but not limitedtoo, a coverage pool or insurance carrier Access to this facilitationprocess may be by subscription to both the potential insured and the RAE300.

[0023] (B) This software will securely maintain customer providedinformation and constantly cross check if with other pertinent databases to maintain an accurate risk worthiness pro file.

[0024] (C) Pre-negotiated rates will be based on the profile mentionedabove. Criteria for rate adjustments will also automatically be madewhen the pre-established rate change thresholds are reached.

[0025] (D) The software will further consider more random factors suchas but not limited too current weather and the time of day a piece ofequipment may be working.

[0026] (E) The software will have the ability to cross check in forcepolicies to provide an insured with information indicating there may becoverage enforce that may mitigate a portion of their risk but areprovided by a third party thus avoiding “double coverage” situations.

[0027] (F) wireless technology in concert with Satellite GPS willfacilitate verification of equipment locations and work hours. Aproprietary module will be developed that will utilize the previouslymentioned technologies in order to verify working and non-working timesin addition to location for a given piece of equipment. This will bepossible as a result of the shrinking of devices their concomitant lowerpower consumptions and the time component inclusive in the GPSalgorithms.

[0028] Acronym Key

[0029] 1. I.R.E.=Intermittent Risk Coverage

[0030] 2. R.A.E.=Risk Assumption Entity

[0031] 3. S.I.M.=Secure Internet Means

[0032] 4. C.C.E.=Continuous Criteria Evaluator

[0033] Customer 100 Requests Specific Type of Intermittent Risk Coverage(I.R.C.) from Risk Assumption

[0034] Entity (R.A.E.) 300 by Secure Internet Means (S.I.M.), Telephonicor other unspecified means

[0035] R.A.E. 300 receives the request and determines if the coveragepool contains the category requested.

[0036] The model anticipates that claims for customer loses due toinsured risk events will be handled through channels already establishedby R.A.E.'s 300 (insurance companies primarily) to service theirexisting client base. The model however, will utilize instantaneousinternet access to expedite the claim settlement process. This accesswill aid the insured in administering it, and any service providersinvolved in the satisfying the claim. This process will be facilitatedby software designed for this express purpose.

[0037] The Constant Criteria Evaluator, in addition to updating risk andrate assessments, will monitor all facets of customer 100 service. Thiswill be accomplished by the use of proprietary software integrated intothe design of the C.C.E 240.

[0038] Means by which a rate is generated by a data module specificallyconfigured for this purpose by means of its internal algorithm.

[0039] Means by which the “rate clock” for a given risk exposure isstarted, stopped or predetermined start/stop times are amended.

[0040] Means by which a contract is prepared in parallel to a customer's100 application for service and/or completing information templatesrelating to their coverage need and requests.

[0041] The processes' Constant Criteria Evaluation function whereby anaccount's risk worthiness profile is constantly monitored and updated.

[0042] Means by which risk exposures of various types may be “bundled”into a financial instrument and traded to allow a company tohedge/mitigate its exposure in a certain category.

[0043] The present invention is capable of achieving the following:

[0044] Enrolling the insured in intermittent risk exposure liabilityinsurance policies of the insurers, the policies providing for avariable premium rate depending upon variable risk exposure during anintermittent use, by the insured, of an insured article:

[0045] The step of verifying locations is enabled using a globalpositioning satellite method to determine the location of the insuredarticle and communicating this information to the process databases bywireless means.

[0046] The step of posting of the insurance premium rates and insurancepremium thresholds for various coverage categories for an account with agiven risk worthiness profile score on the Internet site and ofadjusting the posted premium rates and thresholds as necessary.

[0047] A further capability is to provide a means for potential ainsured to determine premium rates for a particular intermittent riskexposure independent of the application and contract management phasesof the process.

[0048] Another capability of the process is to reduce the cost of riskmitigation (insurance) for an insured and limit unnecessary riskexposure of insurers.

[0049] A further capability of the process is to enable providinginstant insurance coverage for standard liabilities such as rentalvehicles and the like.

[0050] A still further capability is to provide, within the process, amethod of verifying the physical location and state of use of an insuredequipment.

[0051] Another capability of the process is to facilitate the billingand settlement portions of contract management.

[0052] A further capability of the process is to allow individuals andbusiness entities to apply for coverage via the Internet and have theirrisk worthiness profile evaluated as they apply.

[0053] A further capability of the process is to provide a means ofconstantly updating the risk worthiness profile and adjusting ratesaccordingly.

[0054] A further capability of the process is to expedite a customer'ssucceeding transactions by a means configured to learn the customers 100equipment usage pattern and risk mitigation needs and then tenderselection templates of coverage options closely matching theirhistorical needs and requests.

[0055] The invention provides a means by which:

[0056] A rate is generated by a data module specifically configured forthis purpose by means of its internal algorithm.

[0057] A rate clock for a given risk exposure is started, stopped orpredetermined start and stop times are amended.

[0058] A contract is prepared in parallel to a customer's 100application for service and their completing information templatesrelating to their coverage needs and requests.

[0059] An account's risk worthiness profile is constantly monitored andupdated.

[0060] Risk exposures of various types may be “bundled” into a financialinstrument and traded to allow a company to hedge and thus mitigate itsexposure in a certain category.

[0061] The present invention is further enabled for:

[0062] Enrolling the insureds in intermittent risk exposure liabilityinsurance policies of the insurers the policies providing for a variablepremium rate depending upon variable risk exposure during anintermittent use by the insureds, of an insured article.

[0063] Verifying locations using a global positioning satellite methodto determine the location of the insured article and communicating thisinformation to the process databases by wireless means.

[0064] Posting of the insurance premium rates and insurance premiumthresholds for various coverage categories for an account with a givenrisk worthiness profile score on the Internet site and of adjusting theposted premium rates and thresholds as necessary.

[0065] The following examples further define the present method:

[0066] Enrollment

[0067] An applicant will register to use the present invention method byaccessing the dedicated Uniform Resource Locator (URL) for the system'swebsite and completing a template questionnaire. This process will beaccomplished by a system of hierarchical queries that, as satisfied,will lead to ever more detailed rate influencing information well knownto those skilled in the alt of risk management.

[0068] It should be noted, when the applicant or customer 100 begins tofill in the application template they are immediately issued an Accountidentification Number (AIN) for tracking purposes internally within thesystem. This AIN is not published to the applicant until they satisfythe application requirements to the satisfaction of the CCE 240. An AINis the customers virtual passport to navigate and avail themselves ofthe features and benefits of the system.

[0069] An alternative method of customer registration is accomplishedthrough traditional Risk Assumption Entities (RAE's) 300 that have awebsite and have opted to provide their customers 100 the option ofmanaging their risk on as as needed basis. On the RAF's 300 website homepage, the present invention system option is displayed. The customerclicks on this option and is required to supply the RAFE's 300 accountidentifying data. Once this is accomplished, to tile satisfaction of theRAE 300, the customer's data, necessary to fulfil the applicationrequirements of the systems' CCE 240, CMM 230, and TMM 250 Modules, istransferred, in a format recognizable and utilizable by the system, tothese modules as per a prior affiliation agreement (It is, of course,assumed in this embodiment that the affiliate RAE 300 will have all ofthe customer's pertinent rate influencing information on file). Theinitiation of this transfer processes causes the system to assign an AINto this customer. (Please see the glossary for a definition ofaffiliation agreements)

[0070] In either case, after satisfying the registration requirements, arisk profile will be determined based on the ability of the ConstantCriteria Evaluator (CCF) 240 to verify the information provided and arisk worthiness profile score will be established. Alter a RiskWorthiness Profile Score (RWPS) has been established, the customer's AINis published to them to facilitate their progressing through thesucceeding steps in securing risk mitigation (insurance).(See customerdecision and action sequence}

[0071] If information is immediately unverifiable this fact will be madeknown to the customer. Depending on the weight given to the criteriathat is unable to be verified, the risk worthiness profile score will beadjusted upward. An upward adjustment will require an applicant to pay acorrespondingly higher premium for a given coverage package.

[0072] This AIN will be used henceforth by the customer when they log onto the system website and by the present invention system to issuecoverage binders and update the customer's risk worthiness profile. Oncean AIN has been issued a customer can use an expedited transactionprocess to rapidly be issued a binder for a given risk activity.

[0073] Whenever the AIN is entered it will cause the system to perusethe risk worthiness profile associated with the AIN before allowingrates to be quoted and coverage bound for any given risk event oractivity.

[0074] An influencing factor in establishing a risk worthiness profilewould be experience a particular customer has in the activity in whichthey intend to engage.

[0075] The customer's AIN will be linked to other pertinentidentification numbers such as an individual's birth date, Driver'sLicense and Social Security Numbers. In the case of a business entity itcould be linked to a company's Tax I.D., Corporate Registration orResale Numbers. This will be done to negate the risk of using the wrongrisk worthiness profile score or inaccurate information in determining ascore

[0076] Truck Rental Scenario

[0077] A small company or individual needs to, rent a large truck. Therental agency has specific requirements regarding liability insurancethat must be satisfied before they will rent a vehicle. The customner's100 vehicle liability insurance has a very high deductible thresholdbefore the Risk Assumption Entity (RAE) 300 assumes responsibility for aclaim. The rental agency offers coverage on a daily basis, but thecustomer finds the premium to be very high, in their judgement, anddecides to seek an alternative. The customer is aware that certaininsurance carriers, RAE's 300 offer insurance on an intermittent asneeded or “on demand basis’ by means of the present system.

[0078] The following is a customer's 100 Contact, Decision and Actionsequence for the rental or a large truck by means of initial contactwith the system via an Internet site.

[0079] 1. The customer 100 contacts the present invention system byaccessing the system's Internet site through the use of the presentinvention system Uniform Resource Locator (URL) which causes . . . .

[0080] 2. The homepage to display a menu of options one of which is “doyou wish an explanation of the Insurance On Demand TransactionManagement System (IODTMS) 200.” The customer opts by clicking toreceive an explanation which causes . . . .

[0081] 3. The system displays an “orientation” synopsis of the servicesprovided and the method of operation of the IODTMS 200. A roster ofparticipating RAE's 300 is provided as part of the orientation process.At the end of the synopsis the customer is Liven the option of applyingfor service from the system. The customer 100 opts to do so which causes. . . .

[0082] NOTE: The customer 100 is offered the option of more in depthinformation on the various features and benefits of the system atvarious intervals within the synopsis.

[0083] 4. The Internet site to display a menu/template requesting rateinfluencing information from the customer 100. The template proceedshierarchically from the general to the increasingly specific (thenecessary rate influencing information sought is well known to thoseskilled in the art of risk mitigation). This information is used toestablish a Risk Worthiness Profile Score (WRPS) for this particularcustomer (see the Glossary for an explanation of the WRPS). At theinitiation of the application process an Account Identification Number(AIN) will be issued to the applicant, however the AIN is notimmediately published to the customer 100. When the customer is issuedan AIN, the present invention system Transaction Management Module (TMM)250 will begin preliminary stages of contract preparation. The TMMcontinues to prepare the contract in parallel with the customer'sdecision sequence responses, utilizing information derived therefrom.The completion of the application template process (to the satisfactionof the present invention system Constant Criteria Evaluator (CCE) 240triggers the disclosure of the AIN to the customer which causes. (seethe Glossary For and explanation of the CCE 240.

[0084] 5. The notification to the customer that they have been issued anAIN causes the system Coverage Module (CM) 230 to display a template ofvarious risk categories for which coverage is offered through thc IODTMS200. In this case, the customer 100 selects the category “Vehicle” whichcauses . . . .

[0085] 6. The present invention system CM 230 to display a templatecontaining several subcategories, one of which contains the heading“Truck.” The customer selects the heading “Truck” at which time atemplate is displayed requesting specific information about the truckand the circumstances of its intended liability exposure (ie.Make/model, GVW (gross vehicle weight), that it will or won't be usedfor specified hazardous material hauling, alternate driver, etc. Thecustomer 100 satisfies these queries which causes . . . .

[0086] 7. A template to be displayed requesting the level of coveragedollar amount the customer 100 desires. This template will also requestthe customer 100 to specify the time increments in which they wish to bebilled. Completion of this template causes . . . .

[0087] 8. The present invention system to display a template whichincludes the rate for the requested coverage in the RWPS category of thecustomer 100. The template offers the customer the option of acceptingor declining coverage at the displayed rate. This template will alsodisplay invoice settlement options from which the customer 100 mayselect. The options displayed from which the customer 100 selects aredependent upon the customers RWPS and their previous relationship withaffiliate RAE's 300. Their selection will be incorporated in the finalcontract. The customer's selecting a settlement option causes

[0088] 9. The selection of a settlement option is interpreted by thepresent invention system as an indication that the customer 100 wishesto enter into a contract, with all its previously enumerated terms andconditions for risk mitigation (insurance) with a participating RAE 300,at the displayed rate, utilizing the present invention system byacknowledging acceptance by clicking in the space provided on thetemplate which causes . . . .

[0089] 10. A template to be displayed requesting the customer 100 toenter the time at which the rate clock is to start (ie. On issuance of a“binder” or some future time specified by the customer 100).Satisfaction of this requirement causes. . . .

[0090] 11. Upon satisfaction of the present invention system's requestfor the rate clock start time (they may enter a predetermined stop timeas well per the rate clock protocol explained in the Glossary), thecustomer 100 is shown an electronic representation of their contractwith the selected RAE 300 and they electronically verify and acknowledgetheir approval of the agreement (electronically sign) the contract whichcauses . . . .

[0091] 12. The customer to be issued an electronic binder with their AINand a code number that has been assigned to the completed contract forreference at any time.

[0092]13. The customer rents the truck, no claim generating event occursAnd the truck is returned to the rental company which causes . . . .

[0093] 14. The rate clock to be stopped in one of the following manners:

[0094] A. The predetermined rate clock stop time (as per tile start andstop template in #11 of this sequence) passes triggering the cessationof the RAE's 300 “risk exposure” and thus the customer's coverage.

[0095] OR

[0096] B. Tile customer accesses the present invention system Internetsite and navigates through the rate clock stop process via a template tofacilitate selection of start and stop times and amendment of start andstop times. At this time they will stop the rate clock (see theexplanation of this process in the Glossary).

[0097] 15. Stopping the rate clock causes the TMM 250 to prepare aninvoice as per the governing contract between the customer and the RAE300. This invoice is immediately transmitted to the customer as perprocedures established in the TMM 250.

[0098] 16. Settlement is Accomplished by means of debiting a credit cardaccount (the number of which will have been acquired during theapplication process), by debiting a balance held on account or bybilling the customer according to other contractually specified terms(as per #8 in this sequence).

[0099] 17. A claim generating event occurs and the customer contacts thepresent invention system claims adjustment representatives by accessingthe Customer Service Module (CSM) 270 from the present invention systemInternet site homepage (see the Glossary for an explanation of theCSM)270.

[0100] Below is an example of a typical risk generating situation inwhich the Insurance On Demand Transaction Management System presentinvention system may be employed to provide liability insurance.Following the scenario is a customer interaction sequence necessary tosecure liability coverage from a Risk Assumption Entity (RAE) 300 (RAE's300 are primarily insurance companies) that is affiliated with theIODTMS 200.

[0101] Crane Rental

[0102] A steel building election company owns a crane that is usedintermittently. They occasionally rent the crane when it is not requiredon their own job sites. The company has analyzed their intermittentusage pattern and the varying liability coverage (dollar amount)requirements of different work venues, and opted to insure theiroperational (high) liability on an “as needed” or “on demand” basis.They have accomplished their goal by doing business with an RAE 300 thatutilizes the IODTMS 200 system utility.

[0103] It is assumed, for the sake of the following illustration, thattheir present RAE 300 would have all pertinent rate influencing data onfile. It is further assumed that, through the RAE's 300 prioraffiliations agreement with the IODTMS 200, all customer informationwill be formatted to facilitate its transfer to, and use by, the IODTMS200.

[0104] NOTE: After initial registration and issuance of an AccountIdentification Number (AIN), the customer 100 will be able to expeditefuture intermittent liability insurance transactions by entering the AINas soon as they access the website.

[0105] Glossary Attached: An explanation of the configuration andfunction of Insurance On Demand Transaction Management System modules,referred to by acronym can be found in the attached glossary. This istrue, as well, of other terms the reader may encounter that are specificto this document.

[0106] The following is a Customer's 100 Contact, Decision and ActionSequence for a Crane Use Risk Mitigation (Insurance) Transaction as aresult of initial contact with their current RAE (Insurance Provider)

[0107] 1. The participating RAE 300 has a website with a dedicated URL.The customer 100 accesses this website.

[0108] 2. On the RAE's, 300 homepage, the present invention systemoption is displayed. The a customer 100 accesses by clicking on thisoption and is required to supply the RAE's 300 account identifying data.Once this is accomplished, to the satisfaction of the RAE 300, thecustomer's, data, necessary to fulfill the requirements of the presentinvention system CCE 240, CM 230, RGM 260 and TMM 250 Modules, istransferred, in a format recognizable and utilizable by the presentinvention system, to these modules as per a prior Affiliation Agreement(see glossary). The initiation of this transfer process causes thepresent invention system to immediately assign an Account identificationNumber (AIN) to this customer, however the AIN is not immediatelypublished to the customer. The CCE 240 must process and evaluate thecustomer's information, provided via the affiliated RAE 300, toestablish a Risk worthiness Profile Score (RWPS) before the AIN may bepublished to the customer. (The functions of RWPS and CCE 240 areexplained in the glossary.)

[0109] NOTE: After the data transfer process is accomplished and an AINis issued and published to them, it will only be necessary for thecustomer to enter their AIN when they access the website of the presentinvention system or their original RAE 300 to initiate Futuretransactions. The customer will also be able to obtain just the premiumrate for a particular coverage category in an expedited fashion oncethey have an AIN.

[0110] NOTE: When the customer 100 is issued an AIN, the TransactionManagement Module (Tam) 250 (the function of which is explained in theglossary) will begin preliminary stages of contract preparation. The TMM250 continues to prepare the contract in parallel with the customers 100decision sequence, utilizing information derived therefrom.

[0111] 2A. When the present invention system data requirements have beenfulfilled, the IODTMS 200 issues and displays, to the customer 100 theirrespective present invention system AIN.

[0112] 3. The notification to the customer that they have been issued anAIN causes the CM 230 to become engaged in the transaction process andto display a menu of various risk categories for which coverage isoffered through the IODTMS 200.

[0113] 4. The customer 100 selects the category “Heavy Equipment.”

[0114] 5. The CM 230 displays a menu containing several sub-categories,one of which contains the heading “Crane.”

[0115] 6. The customer 100 accesses by clicking on the heading “Crane”at which time a template is displayed requesting specific informationabout the crane and the circumstances of its intended liability exposure(ie. make and model, lifting capacity, any previous equipment failureson it, the hours of anticipated operation (day or night, high traffic)and the like).

[0116] 7. The customer 100 satisfies these queries which causes atemplate to be displayed requesting the level of coverage (dollaramount) the customer desires. This template also requests the customer100 to specify the time increments in which they wish to be billed. Atthis point in the decision sequence the customer may be offered thevariable coverage option if they are eligible (please see the glossaryfor an explanation of the variable coverage option).

[0117] 8. The customer 100 completes the previous template which causesthe present invention system CM 230, after communication with the RateGeneration Module (RGM) 260 (see the glossary for an explanation of theRGM's 260 function), to display the rate for the requested coverage inthe Risk Worthiness Profile Score category of the customer. The Rate isdisplayed as per the time increment specified by the customer 100 forbilling. Alternative time increment billing rates may also be displayedat this time for the customer's 100 comparison.

[0118] 9. A template is displayed by the CM 230 offering the customer100 the option of accepting or declining coverage at the displayed rate.This template will also display invoice settlement options from whichthe customer may select. Their selection will be incorporated in thefinal contract. The options displayed from which they may select aredependent upon the customers 100 RWPS and their previous relationshipwith the affiliate RAE 300.

[0119] 10. The customer 100 opts to enter into a contract with itsattendant terms and conditions, for risk mitigation (insurance) with anRAE 300, at the displayed rate, utilizing the present invention systemby acknowledging acceptance (clicking) on the space provided in thetemplate

[0120] 11. A template is then provided for the customer to enter thetime at which the rate clock is to start (ie. On issuance of a “binder”or some future time specified by the customer 100).

[0121] 12. Upon satisfaction of the present invention system request forthe a rate clock start time (they may enter a predetermined stop time aswell as per the rate clock protocol explained in the glossary), thecustomer 100 is shown an electronic representation of their contract andthey electronically verify and acknowledge their approval of theagreement (electronically sign)

[0122] 13. The customer 100 is issued an electronic binder with theirAIN and the contract code number that has been assigned to the completedcontract for reference at any time.

[0123] 14. The customer 100 dispatches the crane to the job, site thework is completed successfully, no claim generating event occurs and thecrane returns to the relative safety of the company's equipment yard (ifa claim generating event occurs, see #18 in this sequence).

[0124] 15. In this embodiment, the return of the crane to the company'syard completes the “risk exposure”. The rate clock would now be stoppedin one of the two following ways:

[0125] The predetermined rate clock stop time passes triggering thecessation of the RAE's 300 risk exposure and thus the customer'scoverage.

[0126] The customer 100 accesses the website and navigates through therate clock stop process and stops the rate clock (Please see theexplanation of this procedure in the glossary).

[0127] 16. Stopping the rate clock causes the TMM 250 to prepare aninvoice as per the governing contract between the customer 100 and theRAE 300. This invoice is immediately transmitted to the customer as perthe Rate Clock Protocol enumerated in the TMM 250 (this function of theTransaction Management Module (TMM) 250 is explained in the glossary).

[0128] 17. Settlement is accomplished by means of debiting a credit cardaccount (the number of which will have been acquired during theapplication process), by debiting a balance held on account or bybilling the customer 100 according to other contractually specifiedsettlement terms (as per #9 in this sequence).

[0129] 18. A claim generating event occurs and the customer contacts thepresent invention system claims adjustment representatives by accessingthe Customer Service Module (CSM) 270 from the present invention systemhome page (please see the glossary for a description and flow chart forthe present invention system claim settlement procedure via the CustomerService Module).

[0130] The following terms are defined as to meaning and usage in thepresent application in the glossary below:

[0131] Affiliation Agreement: A prior affiliation agreement will berequired of all present invention system participating Risk' AssumptionEntities (RAE's) 300. This agreement specifies standard terms andconditions under which all affiliated RAE's 300 (insurance companies)will contract with insureds to provide liability coverage in a givenrisk exposure category. These conditions will include, but are notlimited to, agreeing to abide by premium rates set by the IODTMS 200 fora given risk exposure, agreeing to the present invention system methodof setting, rates for individual account's (AIN's) in a risk category bymeans of a Risk, Worthiness Profile Score (RWPS) determined by thepresent invention system and the method by which risk exposure intervalsare determined by the present invention system Rate Clock Protocol(RCP). In addition the affiliate agreement may limit coverage categoriesfor which a particular RAE 300 will agree to assume risk.

[0132] AIN=Account Identification Number: This is the “tracking number”assigned to an applying entity (customer) 100 when the applicationprocess is initiated. This number will be cross-referenced with othernumbers particular to a customer such as, but not limited to, birthdate, driver's license, corporate registration or tax identificationnumbers. After initial registration with the IODTMS 200 the customerwill input their AIN upon contacting the present invention systemInternet site to expedite their transactions.

[0133] APM 220=Application Processing Module: This module processes rateinfluencing information provided by customers that access the presentinvention system Internet site directly. It solicits information fromcustomers through a system of menu templates that proceed through ahierarchy from the general to the increasingly more specific (necessaryrate influencing information sought is well known to those skilled inthe actuarial art of risk mitigation). Through its evaluation anddecision algorithm and interaction with the CCE 240 the APM 220 willdetermine the veracity, completeness, and accuracy of informationprovided by customers and will, to the extent technologically possible,notify applicants, in real time, of any discrepancies to afford them theopportunity to make immediate corrections to their application. Thecustomer's Account Identification Number (AIN) is issued and aftersatisfaction of information criteria, published to the customer by theAPM 220 through interaction with the Constant Criteria Evaluator (CCE)240. The APM 220 also transmits information it receives to theTransaction Management Module (TMM) 250 to enable the TMM 250 to beginthe contract preparation process in parallel with the applicationprocess.

[0134] CCE 240=Constant Criteria Evaluator: This present inventionsystem module is the system's central interactive database. This deviceis the repository of all customer 100 risk worthiness and accounthistory data. It will be so configured as to constantly evaluate andreconcile customer 100 data on file or received at the time ofapplication and registration with that found in other pertinentdatabases that have acquired more current information. This externaldata source could be, but is not limited to, a state motor vehicledepartment. This function will be accomplished by means of a “constantquery device” such as, but not limited to, an Internet “web crawler,”that, in effect, will carry a customers 100 risk worthiness profile withit as it peruses other databases for a real time comparison. When adiscrepancy between information in the customer's '100 baseline riskworthiness file and a pertinent database is discovered and verified, therisk worthiness file will be updated. If the updated information tendsto degrade the Risk Worthiness Profile Score (RWPS), an adjustment maybe made in the rates assigned for risk assumptions undertaking after thetime of the update to the RWPS.

[0135] A positive enhancement may also result if a negative factor hasaged to the degree that it no longer warrants negative weighting withrespect to rate-influence. (The data gathering function of the CCE 240will be performed within the constraints of all statutory privacyprovisions as well as limited powers of inquiry delegated by applyingcustomers after they have been duly informed of the use to be made ofthe authorized gleaned information). The CCE 240 also provides decisioninfluencing information to other specialized modules within the presentinvention system on a real time basis, thus optimizing the processing ofinformation by those modules evaluation and decision algorithms.

[0136] CM 230=Coverage Module: The CM 230 is accessed either throughinitial contact with a present invention system affiliated RAE 300 or byinitial contact with the present invention system Internet sitedirectly. After a customer has been issued an Account IdentificationNumber (AIN), the CM 230 provides menu templates of articles andactivities for which the present invention system may provide coverage.When a customer selects a category, the CM 230, by means of itsevaluation and decision algorithm, requests specific informationnecessary to complete a risk assumption contract (insurance policy) withan RAE 300. The CM 230 also communicates with the Transaction ManagementModule (TMM) 250 in the process of preparing a contract that begins atthe initiation of the application processes and proceeds in parallel asinformation is provided by the customer The CM 230 further communicateswith the Rate Generation Module (RGM) 260 to enable the CM 230 to quotea premium rate for a given coverage package.

[0137] CSM 270=Customer Service Module: The CSM 270 will, by means ofits evaluation and decision algorithm, function as a “clearing House” tocustomer inquiries regarding a prior contract or a contract in progressit will aid customers in all preliminary claim preparation functions toexpedite service from the claims adjuster designated by the RAE 300which assumed the risk for which the liability claim is to be filedCustomer initiated the updates will be accomplished by the CSM 270.These include, but are not limited to, updating rate influencing orcredit information and change of electronic or physical address by meansof the CSM's 270 interaction with the Constant Criteria Evaluator (CCE)240. The CSM 270 will be the point of contact for billing inquiriesthrough interaction with the Transaction Management Module (TMM) 250.The CSM 270 will interact with any and all present invention systemdatabases to satisfy customer information requests. The CSM 270 willalso be the IODTMS 200 point of liaison with designees of affiliateRAE's 300 to access the system as needed to perform the functions forwhich they have been assigned by a particular RAE 300. An example ofsuch a designee would be claims adjusters or a third party contractsettlement house that may be designated to collect premiums. Theseexamples are not to be construed to limit the function of the CSM 270 inany way.

[0138] ICORM 210 initial Contact, Orientation, and Routing Module: Thismodule, by means of its evaluation and decision algorithm displays theinitial contact menu on the present invention system Internet site.Potential insureds (customers) select from the options displayed suchas, but not limited to: “Would you like an explanation of our system andservices?” “Would you like to apply for risk mitigation (insurance)?”“Enter your AIN if it has been issued previously to expedite thistransaction” or “Do you wish information regarding a prior transaction?”he present invention system will additionally, by means of itsevaluation and decision algorithm, provide orientation informationincluding, but not limited to, an overview of the concept of InsuranceOn Demand, a comparison of the present invention system with traditionalrisk mitigation models and all legally required disclaimers from withinthe ICORM 210 database. Based on initial menu selections made bycustomers, they are routed to appropriate databases within the present;Invention system. For example, if a customer answers the initial contactmenu question “Do you need to file a claim?” affirmatively, the insuredwill be routed by the ICORM 210 to the Customer Service Module (CSM) 270for initial claim processing and liaison with their contracting RAE's300 designated claims adjuster. In another example, if an insured enterstheir previously issued AIN they will be asked via a menu displayed “ifthey wish to duplicate a type of prior transaction.” If the insuredanswers affirmatively, they will be routed to the CSM 270 foraccommodation of their request.

[0139] RAE 300=Risk assumption Entity: Risk Assumption Entities are tobe considered as any business entity configuration whose partial or solefunction is to provide the opportunity for the mitigation of risk(insurance). In the main, this primarily includes insurance companiesbut RAE's 300 may assume other forms to provide actuarially determinedrisk management opportunities.

[0140] RCP=Rate Clock Protocol: The Rate Clock Protocol is containedwithin the Transaction Management Module (TMM) 250. It operates by meansof an evaluation and decision algorithm that enables insureds topredetermine the interval for which they desire liability coverage. Italso provides a means of allowing the start and stop times of aninterval to be entered in the contact at a later date if the actualexposure interval is not precisely known at the inception of thecontract. The rate clock algorithm is also designed to accommodate theamendment of rate clock start and stop times defining a risk exposureinterval, if it is warranted under the terms of the governing contract.This algorithm is further designed to record rate clock start and stoptimes of segments of different risk levels within one overalltransaction to enable the present invention system to provide a variablecoverage option and the variable premium rates attendant to such anoption.

[0141] RGM 260=Rate Generation Module: The RGCM 260, by means of itsdistinct evaluation and decision algorithm, establishes rates forparticular RAE's 300 risk assumptions by means of actuarial determinantswell known to those skilled in the art of risk mitigation (insurance).In addition, the RGM 260 nteracts with remote databases, through theConstant Criteria Evaluator (CCE) 240, to compare the RQM's 260determinations with industry standards. The RGM 260 determines premiumrates in all categories based upon a proprietarily established riskworthiness scale. The RGM 260 interacts with the Coverage, Module (CM)230 to provide the CM 230 with requested premium rates on specific riskexposures in order that rates may be communicated to potential insureds.This notification to insureds may be accomplished as they are activelyseeking coverage (during the preparation of a contract) or merely toprovide potential insureds premium rate information so they may refer toit as a risk mitigation (insurance) option. Also through the CCE 240,the RGM 260 may use external event criteria such as, but not limited to,severe weather predictions in an area on a real time basis to adjustrates before they are quoted

[0142] RWPS=Risk Worthiness Profile Score: A risk worthiness profile isdetermined by comparing rate influencing information provided by theregistering or applying entity with databases that may contain therequested information to determine the veracity or completeness of thatprovided by the registering entity. Once compiled, this information iscompared with baseline risk worthiness profile standards well known tothose skilled in the actuarial art of risk mitigation in addition toproprietary standards of the present invention system to determine andissue a proprietary Risk Worthiness Profile Score for an applyingentity.

[0143] TMM 250=Transaction Management Module: The TMM 250 receives inputfrom the Application Processing Module (APN) 220 and the Coverage Module(CM) 230 to enable this module by means of its distinct evaluation anddecision algorithm to prepare a risk mitigation contract (insurancepolicy) in parallel with the APM 220 nd CM 230 as those nodules receivethe potential insureds data. The TMM 250 contains the risk exposure RateClock Protocol (RCP) algorithm. The TMM 250 prepares invoices as perpremium rates and verified risk exposure intervals. The TMM 250transmits these invoices to insureds immediately after preparation. TheTMM 250 administers the settlement of an account by means specified inthe contract; especially, but not limited to, by means of credit card,debit card or account debit transactions. The TMM 250 distributesproceeds of the settlement of a particular contract (policy) to the RAE300 that was the risk assuming patty named in that contract. The TMM 250also monitors claims settlement procedures that are most particularlythe province of the Customer Service Module (CSM)270. The TMM 250transfers pertinent account data to the Constant Criteria Evaluator(CCE) 240 for archiving

[0144] Variable Coverage Option: Generically, within the presentinvention system, tile variable liability coverage option entails theassumption, by the RAE 300, of different levels of risk within oneoverall transaction which allows the RAE 300 to access premium ratesconcomitant with these varying risk levels. This option, in order to becontractually exercised, must be selected at the initiation of acontractual risk assumption by an RAE 300. Specific types of articlesand their usage may be particularly suited to this type of riskmanagement because of clear delineations of risk level in the usagepattern of the article. A crane, for instance, may be caused to go onstandby status at a job site which reduces its liability exposure fromthat which it would experience under active operation. With the variablecoverage option, the cranes owner will he able to change to a lowerlevel of coverage during the standby period with its attendant lowerpremium assessment. This will be accomplished by means of a variablerate evaluation and decision algorithm protocol within the TransactionManagement Module (TMM) 250. The TMM 250 will be accessed through theInitial Contact, Orientation and Routing Module ICORM) 210. The variablecoverage option, when exercised, will neccessitate alteration of theindividual transaction rate clock protocol established at the outset ofthe contract. Provision for this accommodation has been made within theevaluation and decision algorithm of the TMM's 250 Rate Clock Protocol(RCP).

[0145] While the invention has been described with reference to at leastone preferred embodiment, it is to be clearly understood by thoseskilled in the art that the invention is not limited thereto. Rather,the scope of the invention is to be interpreted only in conjunction withthe appended claims and it is made clear, here, that the inventor(s)believe that the claimed subject matter is the invention.

What is claimed is:
 1. An intermittent risk exposure liability insurance method comprising the steps of: establishing an Internet business site enabled for communication with insurers and insureds through Internet service providers; enrolling the insureds in intermittent risk exposure liability insurance policies, the policies providing for a variable insurance premium rate depending upon an intermittent use of an insured article; logging start and completion times of each intermittent use of the insured article on the Internet business site by the insured; verifying start and completion times of use of the insured article in accordance with the logged start and completion times; and applying and billing premium insurance rates in accordance with the verified and logged start and completion times of use. 